Gift cards for Christmas

One in three gift cards expires before it's fully used

Trying to find the right gift for someone can be an exhausting and fruitless experience – especially around Christmas time. The solution? Let them pick it themselves! Every year Australians spend up to $2.5 billion on gift cards for family and friends. And nearly 90% of us received a gift card or gave one as a present in the past 12 months. That might spread a lot of Christmas cheer – if most gift cards didn't run out too soon and come with hidden fees, charges and conditions.

Many gift card recipients end up empty-handed. One in three of the 735 respondents to a CHOICE member survey lost the full value of at least one gift card in the last three years.

So which are the best gift cards, according to our member survey?

Best and worst gift cards

Gift card expiry date

Of those who took our survey, 60% had problems with gift cards, and premature expiry was the biggest issue. NSW Fair Trading Minister Matthew Mason-Cox tells CHOICE that early expiration is the number one complaint made about gift cards.

Mason-Cox recalls a consumer complaint where a retailer didn't honour a gift card just one day after it expired. "If the card has expired, then legally the retailer doesn't have an obligation to honour it," he said. In this case, the retailer relented after Fair Trading stepped in.

But CHOICE has heard of many cases where complaints to the retailer fell on deaf ears. It never hurts to ask, though. Of our surveyed members who requested that an expired card be reinstated, about a third were successful. "I explained that I had missed their cut-off time, but the restaurant cheerfully honoured the card," one member, Gillian, told us.

Check to see if the expiry date is printed on the gift card. If not, the trader must allow "reasonable time" in which to use the card under ASIC regulations. But the definition of reasonable may be very different for consumers and retailers. While expiry dates vary from a few months to two years, half of our survey respondents said a gift card should never expire.

Melissa, a member, expressed a view shared by many: "I don't understand why gift cards have such short expiry dates. The store has taken the money; they should be obliged to honour the card for a minimum of 10 years."

Short changed

In late 2011, the Commonwealth Consumer Affairs Advisory Council launched an inquiry into the gift card market and released an issues paper that highlighted the problems. But ultimately this had little impact, and consumer rights in Australia still lag behind other markets.

In the US, for example, gift cards can't expire in under five years and clear fee disclosure is mandatory. As a result, it's estimated that just one per cent of gift cards purchased in the US end up expiring or going unused.

CHOICE survey – key results

We conducted a survey of CHOICE members in late September/early October 2014. Of the 735 respondents, a large majority had given and/or received at least one gift card in the last three years.

$50 – the most common gift card amount

$70 – average amount for giving a gift card

$90 – average amount for receiving a gift card

50% – believe a gift card should not expire at all

60% – had problems using at least one gift card they'd received in the past three years.

These were the most common problems:

The card expired before the full value was used.

It was difficult to find something they wanted to buy in the store(s) where the card could be used.

It was hard to check the balance on the card or there was a fee to check the balance.

Some stores/outlets did not accept the card, for example with a shopping centre card.